All Forum Posts by: Jonathan Taylor

@Mohammed Milord Ill reiterate the sentiment here. @Steve K. and @Nathan M kiefer 's logic is sound. As a first time buyer, over leveraging is an incredibly risky endeavor. I have clients (Im a mortgage broker) who over leverage with gap funders and HMLs on purchases and even THEY have valuation and cash issues when concluding a project. These clients have 10-20 yrs experience. Keep the fire to invest alive but do not shunt your growth by leveraging to the max. No money down options just aren't smart for beginners. That and lenders wont give a loan to someone who doesn't have reserves.

@Inga Davis lesson to learn for the next BRRRR is 80% cash out is a rare and expensive leverage option. Running exit numbers for 70-75 is the safest bet. To answer your question about which is better, can you pay off the 20k HELOC from the cash flow you make on the property? The 75 LTV at 7.5% is a stronger option as you have more room for cash flow to pay off the HELOC

Check their reviews on multiple platforms, make sure the reviews range in dates, check bigger pockets find a lender and ask other investors who they have used. 

@Salvador Covarrubias I support the above comments, any time an appraisal comes back with subject to or listing deferred maintenance, the lender will require those items to be remedied or fixed prior to closing. It sounded like the team working on the loan wasn't motivated to close as the usual path on these situations is to find a solution with the sellers to get the loan done. 

@Ryan Zimmerman if you buy using a conventional loan as an owner occupy, you must occupy the property to meet the occupancy requirements. If you buy as an owner occupy but do not occupy the property, this would constitute mortgage fraud and is not a path you want to go down. If you are buying as an investment property, then the loan will clearly state that you CANNOT occupy the property and the terms and down payment are less favorable than an owner occupy loan. 

So to answer you question if you can honor the lease, you can if you buy with an investment property conventional loan. If you are planning on living in the property as your primary, you can request to terminate the lease as you will be taking possession for owner occupy, but confirm with a local real estate attorney on the specific verbiage and process as it varies by state. 

@Whitney Lares I kept my first BRRRRs as LTRs, I know MTR and STR have higher income potential but my goal is time and income, LTRs provide me that and the management of these in STL are much lower monthly % so it works for me. I have clients/investors who do M/STRs but its a full time job for them.

@Whitney Lares I am in the same boat as you. I live in CA bought in STL a few years back, did a traditional BRRR but the prices now are too high numbers on Brrrs to work. My advice (which I am doing now) is offering lower offers on properties that have sat for a while (60-90 days +) and see. Offering too low gets rejected but once you are at the negotiations, then you can make something work.

@Steve Meyers we have lenders who can take sub 100k deals, what is your scenario or DM me if you have specific questions. 

@Evan Holly DSCR loans (already mentioned above) have STR specific options for you considering you have experience. These loans are very similar to LTR DSCR loans but use appraised market ST rents to qualify the debt coverage ratio. These loans can close in an LLC or personal name (state dependent) but would solve your problem. There are a lot of pitfalls to renting from your own LLC that could potentially kill the deal and are more amenable options that would make this loan work.

@Nick Boring congrats on the completed project! I have personally done several reno projects and an ADU build in Los Angeles so I know the struggles with these deals. What questions do you have? Sent you a DM as well.